Order 20 1 4

- 7

- 1

Served: July 1 , 20 1 4



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1 st day of July , 2 01 4

ORDER REQUESTING PROPOSALS

Summary By this Order , the Department is requesting proposals from carriers interested in providing

E ssential Air S ervice (EAS) at Fort Leonard Wood , Missouri, with or without subsidy, for a new contract period, beginning January 1, 201 5

. Interested parties should submit their proposals no

later than August 13 , 201 4 (See Appendix A for a map ).

Background By Order 2012

- 11

- 35

, November 30 , 201 2 , the Department re selected Hyannis Air Service, Inc. d/b/a Cape Air (Cape Air), to provide EAS at Fort Leonard Wood for a two

- year period beginning January 1, 2013

. Under that Order, t he carrier operates four nonstop round trips each day (28 weekly) to St. Louis, with 9

- passenger Cessna 402 aircraft

. Fort Leonard Wood also experiences a significant n umber of passengers deploying to or returning from active duty military service, many of whom are carrying heavy loads of military equipment and supplies. Due to the operational limitations of the Cessna 402

, Cape Air operate s accompanying freight

only se rvice when necessary

.

Request for Proposals As the end of the current rate term approaches, in order to provide sufficient time to complete the

carrier

- selection process before the current contract expires, we are here requesting proposals from carriers interested in providing EAS at Fort Leonard Wo od

, with or without subsidy , for a

new contract period beginning January 1, 201 5

. Carriers should file their proposals no later than August 13

, 201 4

. After that date , our staff will docket propos als, thereby making them public

. Shortly afterwards, we will provide a summary of the proposals to communit y officials and ask Essential Air Service at

FORT LEONARD WOOD, MISSOURI

Under 49 U.S.C. § 41731 et seq

. DOCKET DOT

- OST

- 1996

- 1167- 2

-

them to submit their final comments

. We will give full consideration to all proposals filed in a timely manner. 1

Interested carriers should prepare their proposals with every expecta tion that their initial proposals will also be their final and only proposals

. We retain the discretion to negotiate proposals with carriers when we deem it desirable

. We also retain the discretion to reject outright all unreasonable or unrealistic proposals and solicit a new round of proposals.

We are here providing interested carriers with some basic information to serve as guidance when they prepare their proposals, but we will not prescribe a precise format for their proposals. We

expect propos als to adequately describe the service being proposed and the annual amount of subsidy being requested. The applicants can make their own judgments as to the level of detail they wish to present; however, we recommend they include information concerning p roposed schedules and projected block hours. In addition, applicants are urged to provide financial data supporting their subsidy requests, including information on their projected expenses and revenues. We strongly encourage clear, well

- documented proposa ls that will facilitate their evaluation by the affected communities and the Department. 2

With respect to Fort Leonard Wood, we expect service proposals consistent with what the community is currently receiving, i.e. four daily round trips ( 28 per week) o n 9

- seat aircraft to Chicago O’Hare, Dallas/Fort Worth, St. Louis or another suitable hub airport with numerous airline connections to the national air transportation system . If larger aircraft are contemplated,

fewer frequencies should be proposed. As a lways, we wil l formally solicit the community ’ s views on any service options we receive before making a long

- term carrier selection decision.

We encourage proposals that meet these requirements in an efficient manner

. Carriers are also

welcome to propose more than one option, if they choose

. T hey need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities (e.g. different hubs or contract length) with subsidy requirements that remain com petitive.

Service and Traffic History In order to assist interested carriers in developing traffic and revenue projections for their service proposals, we have summarized some historical origin

- destination traffic in Appendix B. For the

1 Carriers should not expect the Department to accept late filings. In cases where a carrier proposes to provide EAS without subsidy and we determine that service can be reliably provided without such compensation, we typically do not proceed with the carrier

- selection case. Instead, we simply rely on that carrier’s subsidy

- free service as proposed.

2 In selecting a ca rrier to provide subsidized EAS , 49 U.S.C. § 41733(c)(1) directs us to consider five factors: (a) service reliability; (b) contractual and marketing arrangements with a larger carrier at the hub; (c) interline arrangements with a larger carrier at the hub ; (d) community views, giving substantial weight to the views of the elected officials representing the users; and (e) whether the carrier has included a plan in its proposal to market its service to the community

. In addition, the Consolidated Appropriat ions Act, 2014, Public Law No. 113

- 76, provides that when selecting a carrier to provide EAS, the Department may consider the relative subsidy requirements, thus codifying a factor that we have considered since the inception of the program. Interested car riers should also be aware that our general provisions governing Essential Air Service will be included in the selection Order as part of our authorization of subsidy for the selected service. Appendix C of this Order contains those general provisions.- 3

-

m ost recent 12

- mo nth period for which data is available , ended March 31 , 201 4

, there w as an average of 25.5 enplaned passengers per day at Fort Leonard Wood

. 3

As Fort Leonard Wood is an active military base, many of the passengers utilizing the airport are

either deploying to or returning from active duty

. Carriers should be aware that t hese passengers are often carrying substantial loads of military equipment and supplies (sometimes in excess of

200 pounds per person)

. This can present weight and balance issues d epending on the aircraft

used

. Under the existing EAS contract, we have authorized Cape Air to operate additional freight

- only flights at a subsidy rate 94 % that of the passenger service. Over the life of the existing contract, Cape Air has had to operate these freight

- only flight s 54.1% of the time, on

average

. Carriers should take this unique situation into account when drafting their proposals.

Filing Procedures Carrier proposals should be submitted to the Department with all materials merged into a single

document

. In addition, because the document will be published on Regulations.gov, each page

should be formatted to be viewed online.

Other Carrier Requirements The Department is responsible for implementing various Federal statutes governing lobbying activities, drug

- free workplaces, and nondiscrimination. 4 Consequently, all carriers receiving Federal subsidy for EAS must certify that they are in compliance with Department regulations regarding drug

- free workplaces and nondiscrimina tion, and those carriers whose subsidies exceed $100,000 over the life of the rate term must also certify that they are in compliance with the regulations governing lobbying activities. Because the Department is prohibited from paying subsidy to carriers that do not submit these documents, all carriers that plan to submit proposals involving subsidy should be aware that the selected carrier will be required to complete the required certifications. Interested carriers requiring more detailed information re garding these requirements should contact the Office of Aviation Analysis at (202) 366

- 5903. 5

Community and State Comments

The communit y and state are welcome to submit comments at any time. As noted above, w e encourage prospective applicants to contact the communit y before they submit their proposals so that they can tailor them to the communit y ’ s needs, as they will not be able to amend them after the due date. As noted earlier, we will provide a copy of the proposals to the civic parties and

ask them to submit their final comments shortly after August 13, 2014 , the due date for carrier proposals.

3 Enplaned passengers per day calculated by adding origin and destination passenger totals f rom Appendix B, then dividing by 365 (days), then dividing by 2

. 4 The regulations applicable to these areas are: (1) 49 CFR Part 20

-- New restrictions on lobbying; (2) 49 CFR Part 21

-- Nondiscrimination in federally

- assisted programs of the Department of Transportation

-- Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27

-- Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382

-

- Nondiscrimination on the basis of disability in air travel; and (3) 49 CFR Part 29

-- Government

- wide debarment and suspension (non

- procurement) and government

- wide requirements for drug

- free workplace (grants).

5 The certifications are also available on the web at http://www.dot.gov/policy/aviation

- policy/small

- community

rural

- air

- service/essential

- air

- service

.- 4

-

This Order is issued under authority delegated in 49 CFR 1.25a(b) and re

- delegated to the Director, Office of Aviation Analysis.

ACCORDINGLY,

1

. We reque st that carriers interested in providing Essential A ir S ervice at Fort Leonard Wood

, Missouri , submit their proposals, with or without subsidy requests, no later than

A ugust 13

, 201 4 . P roposals should be e

- mail ed to EAS@dot.gov

, with the subject “Proposal to

Provide Essential Air Service at Fort Leonard Wood , Missouri (Docket DO T

- OST

- 1996

- 1167)

. ” 6

2

. Docket DOT

- OST

- 1997

- 1167 will remain open until further order of the Department; and

3

. We will serve copies of th is O rder on the mayors of Waynesville and S aint Robert, Missouri,

pers onnel at Fort Leonard Wood, the airport manager of Waynesville/St. Robert Regional Airport, and the service list for this docket

.

Persons entitled to petition the Department for review of this O rder under the Department’s

Aviation Economic Regulations, 14 CFR 385.31(a), must file such petitions within seven ( 7 ) days after the date of service of this O rder.

This O rder will be effective immediately, and the filing of a petition for review shall not preclude its effectiveness.

By:

TODD M. HOMAN

Director Office of Aviation Analysis

(SEAL)

An electronic version of this document is available

on the Internet at http://www.regulations.gov

6 Questions regarding filings in response to this Order may be directed to A.J. Muldoon at (202) 36 6

- 1058 or albert.muldoon@dot.gov

.Appendix A



## AREA MAP

This map is provided by Sabre ® AirVision TM Profit Essentials and is being used with express permission of the copyright holder, Sabre Airline Solutions®.Appendix B Page 1 of 2



### Traffic History 1

1 Source: BTS T

- 100, Passengers in Scheduled Passenger Servic e. 

### Year Quarter Origin Pax Destination Pax O&D Pax

2011 1 1,249 1,538 2,787

2011 2 1,785 1,884 3,669

2011 3 2,124 2,060 4,184

2011 4 1,816 1,806 3,622

2011 Total 6,974 7,288 14,262

2012 1 1,711 1,955 3,666

2012 2 2,119 2,260 4,379

2012 3 2,104 2,318 4,422

2012 4 1,957 2,016 3,973

2012 Total 7,891 8,549 16,440

2013 1 1,806 2,016 3,822

2013 2 2,301 2,199 4,500

2013 3 2,354 2,162 4,516

2013 4 1,864 1,624 3,488

2013 Total 8,325 8,001 16,326

2014 1 1,706 1,741 3,447

2014 Total 1,706 1,741 3,447Appendix B Page 2 of 2

Cape Air Passenger and Freighter Operations by Month 1

1 Source: Cape Air reporting. 0% 10% 20% 30% 40% 50% 60% 70% 80%

0 50 100 150 200 250 300

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 Total Departures - Pax Total Departures - Freight % FreighterAppendix C

Example of General Terms and Conditions for Essential Air Service

The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance with the terms and stipulations of the rate Order, including the service plans outlined in the Order and any other significant elements of the required service, without prior approval. The carrier understands that an aircraft take

- off and landing at its scheduled destination constitutes a completed flight; absent an explanation supporting subsidy eligibility for a flight that has not been com pleted, such as certain weather cancellations, only completed flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full conformance with the Order for a significant period, it may jeopardize i ts entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of these rates, it must first notify the Office of Aviation Analysis in writing and receive written approval from the Department to be ensured of full compensation. Should circumstances warrant, the Department may locate and select a replacement carrier to provide service on these routes. The carrier must complete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. In determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider the extent to which the goals of the program are met and the extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or complete, terminates or reduces payments for service or changes service requirements at a specific location prov ided for under this Order, then, at the end of the period for which the Department does make payments in the stipulated amounts or at the stipulated service levels, the carrier may cease to provide service to that specific location without regard to any re quirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

Subsidy contrac ts are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not operate to controvert the foregoing paragraph.

Funds may not be available for performance under this Order beyond [DATE]. The Government’s obligation for performance under this Order beyond [DATE], is subject to the availability of funds from which payment for services can be made. No legal liabilit y on the part of the Government for any payment may arise for performance under this Order beyond [DATE], until funds are made available to the Department for performance. If sufficient funds are not made available for performance beyond [DATE], the Depart ment will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the month for which compensation is being claimed. For example, claims for service provided in J uly must be filed by October 31st; August claims must be submitted by November 30th, and so on.